Shulou(Shulou.com)11/24 Report--

CTOnews.com March 19 news, China Mobile Games Technology Group Co., Ltd. today issued a "profit warning," expected to record a net loss of about 210 million yuan to 225 million yuan for the year ending December 31,2022. The net profit of China Mobile Games in 2021 is 594 million yuan, so it is expected to turn from profit to loss in 2022.

According to China Mobile Games, the decline in the Group's performance is mainly due to the following factors, CTOnews.com attached to the original announcement:

(1)Revenue for the year ended 31 December 2022 decreased by approximately 30% to 35% as compared to the year ended 31 December 2021, mainly due to the decrease in revenue generated from a number of games scheduled to be launched by the Group for the year ended 31 December 2022 that were later than expected in obtaining release numbers and certain games that were already in the late stages of their life cycles;

(2)Non-operating other income and gains for the year ended 31 December 2022 decreased by approximately 60% to 80% as compared to the year ended 31 December 2021, mainly due to the relatively significant gain on disposal of investments in certain associates recorded by the Group for the year ended 31 December 2021;

(3)Impairment of non-operating financial and contract assets for the year ended 31 December 2022 increased by approximately 130% to 180% as compared to the year ended 31 December 2021, mainly due to impairment of prepayments made for conditional share purchases, reclassified to deposits and other receivables for the year ended 31 December 2021;

(4)Non-operating other expenses for the year ended 31 December 2022 increased by approximately 490% to 550% as compared with the year ended 31 December 2021, mainly due to the decline in operating results of certain investee enterprises in China whose digital publishing performance did not meet expectations in 2022. As a result, the Group has made corresponding impairment provision for investments in the above investee enterprises; and financial assets at fair value through profit or loss are expected to record significant fair value losses.

The board of directors of CMG considers that although the Group recorded a net loss for the year ended 31 December 2022, the Group's operating segments continued to generate profits for the year ended 31 December 2022 and the net loss was mainly attributable to the above reasons. The Group's operating results for the first half of 2023 will improve through continuous resource consolidation and optimisation to reduce costs and improve efficiency, as well as the availability and availability of license plates for new game releases.

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